The SEC last month charged Bravata and his business partner with five civil counts of securities fraud, alleging the two raised at least $50 million from investors but spent $7 million on expensive items such as cars, homes, a boat and jewelry.

In a brief telephone interview with the Gazette, Bravata denied the SEC charges and said he had been cleared of fraud by the state of Michigan. He said he had settled a case brought in March by the Michigan Office of Financial and Insurance Regulation.
Bravata e-mailed several documents to the Gazette, including a settlement offer from OFIR.

On March 30, OFIR ordered Bravata and his companies, Bravata Financial Group, which operated a now-closed office in Portage, and BBC Equities, to cease and desist from operating as investment brokers and from selling unregistered investment products.
The state made no allegations of fraud in the March cease-and-desist order.

The settlement offer, dated July 10, makes no mention of fraud and requires Bravata and his companies to admit to violating state securities law and pay $5,000 fines.
Jason Moon, an OFIR spokesman, said Monday that Bravata had declined the settlement offer, and a hearing on the order was scheduled for Oct. 20 in Lansing.

OFIR officials issued the order because it "was the most efficient step we could take at the time," Moon said.

"We always had suspicions that there was fraud in this case, and we shared our suspicions with the SEC to help strengthen their case," he said.

Bravata also released a written statement Monday denying the SEC's charges, stating that BBC Equities was building a successful company, not running a Ponzi scheme.

"BBC Equities successfully raised money from investors and with this money BBC Equities built a viable real-estate business that not only grew, but grew into a very large company," the statement said.

The statement goes on to say that investors received information prepared by "experienced securities lawyers" disclosing risks of investing and that investor funds could be used to fund investor distributions.

A Ponzi scheme is defined as an ongoing ploy to raise money from new investors in order to pay off earlier investors.

But, the statement says, "the SEC has studiously avoided many of the correct facts and selected only information they believe points to a Ponzi scheme."

The statement also mentions "high profile enforcement lapses" by the SEC, apparently referring to the multi-billion-dollar Ponzi scheme perpetrated by Bernard Madoff, as a reason for the SEC's action against Bravata.

Madoff, who is serving a 150-year prison sentence after being convicted of criminal fraud charges earlier this year, avoided SEC scrutiny for years despite warnings from Harry Markopolos, an independent financial fraud investigator who says he tried unsuccessfully to get the SEC to investigate Madoff.

Bravata also repeated his assertion to the Gazette that a 1995 Ferrari, which the SEC alleges Bravata bought for $90,000 after securing his first investment in BBC Equities in 2006, was paid for with his own money.

In court filings earlier this month, Bravata's defense attorney called for the car to be removed from a judge's order that froze all assets of Bravata, his family, the companies and Richard Trabulsy, Bravata's business partner.

Bravata wants to use the car as collateral on loans to help him pay his legal fees and other expenses. He is arguing that the money came from commissions he earned with his former employer, insurance company New York Life.

He also is asking the U.S. District Court in Detroit to allow him to borrow against a life-insurance policy.